By the end of topic, participants should be able to;
1. Appreciate the usefulness of index numbers in monitoring changes over time 1. Calculate simple indices
2. Determine simple aggregate price indices
3. Use laspeyre’s and Paashe’s price indices to determine weighted indices.

What is an index number?An index number is a statistical measure designed to show/ monitor changes over a period of time in the price, quantity or value of an item or a group of items. It compares the value of a variable at any time with its value at another fixed time called the base period. There are different types of index numbers eg. Price index numbers, cost of living index numbers, sales index numbers etc.

The base yearA base year can be defined as the year against which all other years are compared. The base year selected should be a stable/ normal year where you do not have prices changing rapidly. It should not be too distant from the current year. The price or quantity of base year is represented by 100 and those of other years measured against it. An index relative

An index relative sometimes just called a relative is the name given to an index number which measures the change in a single distinct commodity

Simple indices
Index for a period = value in a period
Value in base period

Simple aggregate price index
= (47500)/ 49500 x 100 = 96
Simple aggregate price index
This type of index has a number of disadvantages. It ignores importance of each item and the units to which the prices refer. Average simple price indexΣ (Pn/P0)x100
n
Where n is the number of items
It shows the overall increase in prices
Weighted indices For a price index to be realistic, it should take into account the relative importance of the commodities. Base year weighted index = Cost of base period quantity at current prices Cost of base period quantities at base period prices

Base year weighted index
Base year weighted index assumes that the quantities purchased do not change from the base...

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...What methods of IndexNumber calculation is used to calculate Cost of Living Index (CLI).
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The different types of simple index that...

...INTRODUCTION
An indexnumber is a statistical measure which is designed to express changes in a variable or a group of related variables under two different situations. They are usually expressed in percentage form. The comparisons may be between the periods of time, between places or other characteristics.
We can also say that an indexnumber is a number which indicates the level. of a certain phenomenon at any given...

...﻿IndexNumbers of Commodity Prices and Industries
In India indexnumbers are constructed for a wide range of economic subjects and their use is constantly increasing. The construction of indexnumbers started in India as early as the last quarter of 19th century. The main use of indexnumbers is to facilitate the assessment of average changes over the years with regard to wide...

...What methods of IndexNumber calculation is used to calculate Cost of Living Index (CLI).
Cost of Living Index is a type of index study which is used to examine expenses that people incur to maintain a regular life standard including food, clothing, housing and social activities.
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...Importance of IndexNumber in Business
Introduction:
An indexnumber is a statistical device for comparing the general level of magnitude of a group of related variables in two or more situation. If we want to compare the price level of 2000 with what it was in 1990, we shall have to consider a group of variables such as price of wheat, rice, vegetables, cloth, house rent etc., if the changes are in the same ratio and the same...

... * To develop positive attitude towards mathematics.
INTRODUCTION
IndexNumberIndexnumbers are today one of the most widely used statistical indicators. Generally used to indicate the state of the economy, indexnumbers are aptly called µbarometers of economic activity. Indexnumbers are used in comparing production, sales or changes exports or imports over a certain period...